Why is the Ministry of Finance sharply cutting budget spending?

Why is the Ministry of Finance sharply cutting budget spending?
Opinion

6 July, 13:21
Дмитрий Прокофьев
Экономист
By cutting federal treasury spending by 1.6 trillion rubles, the Russian authorities are returning the budget to its natural state.

Dmitry Prokofiyev

Everyone writes (with reference to Vedomosti) about the plans of the Ministry of Finance in the next three years to reduce federal treasury spending by 1.6 trillion rubles, reducing spending on almost all state programs and “non-program activities”.

From this it is concluded that the government has problems with money, otherwise why would it need a sequester of the budget?

In fact, right now the authorities have no problems with money, for what the authorities consider necessary for themselves, they spend money without counting, and plan to continue to do so.

What people think of as a “budget sequestration” from the point of view of the authorities is just a return of the “budget” to its natural state, when the owners of the country spend money exclusively in their own interests, and everything that does not meet these interests will be spent on residual principle.

In general, the history of the growth of people's well-being through the distribution of oil windfall profits has already ended 10 years ago. They indulged - and that's enough, the authorities say to the people, the authorities decided that your standard of living is completely enough for you, and maybe - and we'll lower it again, you're not used to it, but it's only easier for us.

By the way, the government does not refuse to support its electoral base, the state program “Social Support for Citizens”, within the framework of which it is necessary to finance the indexation of pensions and benefits for inflation close to twenty-year records, will not be sequestered. And everyone else will live as best they can - that's how the Stalinist collective farmer not only worked out everything he was supposed to do and handed over agricultural products "at fixed prices", but paid taxes for his subsidiary plot and paid for both the medical assistant's station and the village teacher.

And by refusing any kind of "investment", the government shows that it understands the basics of economic theory. Any economic investment action is actually an offer of new opportunities to the market. These proposals, in turn, must correspond to the demand in the market - existing or able to form. Otherwise, such actions are economically meaningless. The government reasonably does not expect any "growing demand" to keep what is, "replacing" the disappeared, and maintaining a more or less acceptable assortment in stores. So why is the boss spending extra money here?

Therefore, it is wrong to talk about "budget cuts" - it would be correct to say about bringing the budget in line with the real, and not imaginary, priorities of the authorities.

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